Secure Technology for a Connected World

Extra–Financial Reporting Statement

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PARAGON ID STRATEGIC VISION« To provide secure technology for a connected world »

Strategy statement

Paragon ID SA is a technology company which engineers industrial processes for the manufacture of RFID antenna, cards and labels, and develops software for their operation and deployment.

Formed from the merger of the labelling and ticketing-related activity of the Paragon Group and ASK, a renowned specialist in the development of RFID technology, the Company’s strengths derive from its combination of industrial and technological expertise.

Paragon ID supplies, through its own distribution channels and through partners, RFID solutions and component elements thereof to clients across the world - to end-user customers, to integrators and to operators, typically in a B2B2C configuration.

Over the next three years, the Company aims to grow its sales and EBITDA through expansion in four specific markets:

Transport & Smart Cities

Track & Trace and Brand Protection

e-ID & secure identification

Banking & payment

1 3 42

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Our strengths

Our values

€108 m+Sales

€8 m+EBITDA

750colleagues

6+sites

Our key numbers2018-2019

150 CitiesSupplied with access control solutions

4 billion+Journeys enabled

Respect

Responsibility

Teamwork

Innovation

Security & Environment

A track-record of

successful acquisitions

Our clients

Our Industrial know-how

Our technological

expertise

Our international

footprint

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Transport & Smart Cities

Our four markets

e.IDIdentification documents

Track & Trace andBrand Protection

Payment

Operating from threecertified and highlysecure production sites, weoffer to the eID sector, eCovers, Inlays and eDatapages for passport and card applications of all types.

A pioneer in the development of RFID applications dedicatedto the banking sectorand its suppliers, ourinnovative paymentsolutions bring securityand an increased user experience.

Process optimisation, traceability and brand protection have become a constant concern for stakeholders in many sectors.

Our expertise in RFID brings tailor-made solutions to their challenges.

From the first magnetic tickets, to contactless cards and mobile ticketing, we have been part of all technologicaladvances in access control.

We work today to buildtomorrow’s Smart Cities.

Payment2%

eID12%

Smart Cities59%Track & Trace

27%

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Our resources

Financial Capital

Human Capital Intellectual Capital

Industrial Capital

Technological R&D

• Antenna design• Development of innovative

RFID products• Development of new

manufacturing processes

IT and electronic R&D• Operating systems• Blockchain, algorythms,

secure encryption• Mobile app & software• Database management

A unique industrial set-up

• 4 secure production sites (incl. Romania)

• Overall control of the production chain

• 400 million RFID productsmanufactured each year

An international team with highly qualified staff

Highly qualified employees who have accumulated over the years recognized industrial, technological and R & D expertise in their markets.

Financial performance30th June 2019

• €108 M sales with an annual growth of 7%

• EBITDA (1) growing by 14% with a margin (EBITDA (1) / sales) of 7.6%

• Nearly €4 M worth of investments in the financial year ended June 30th, 2019.

Operating income before depreciation, amortization and non-recurring items.

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International development& external growth strategy

International footprint

A dynamic external growth strategy

108 M€CA

2018-19Acquisition d’Amatech

Acquisition de RFID Discovery

Participation dans AirWeb

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A corporate social responsibility policy (CSR) in line with the strategic vision of Paragon ID.

As part of its strategy, PARAGON ID integrates environmental, social, ethical and economic considerations into its activities and interactions with its stakeholders.

PARAGON ID's responsibility for the impact of its decisions and activities on society and the environment is reflected in transparent and ethical actions which:

• Contribute to sustainable development including the health and well-being of the society

• Take into account the expectations of the stakeholders• Respect the laws in force and comply with international standards• Are integrated throughout the organisation and implemented

throughout its relationships with its stakeholders

Paragon ID also responded to the Ecovadis questionnaire in September 2019 in France and received a gold medal for its CSR performance on the following topics:

• Social and Human rights• Ethical• Sustainable purchasing• Environment

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The Management commits to respect the following company values and ensure they are followed by all personnel:

Responsibility

Let’s respect our commitments and report on our results.

Respect

Teamwork

Innovation

Security & Environment

Let’s share our ideas and knowledge for the collective interest and with due respect for our differences.

Let’s work together and communicate our goals, our satisfaction and dissatisfaction, our difficulties and successes.

Let’s adopt an open-mind in order to promote freedom of speech and creativity.

Let’s take care of our own safety, as well as our colleagues’ and partners’ safety. Let’s respect the environment.

Our values

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These values, combined with the QSE management system and the continuous improvement approach, including the ISO 9001, ISO 14001, ISO 27001 and ECOVADIS standards (depending on the country) form the basis of our commitmentto our customers, our employees, our suppliers and ourshareholders to:

• Develop our capabilities to innovate• Develop the operational and management skills of our teams• Put the appropriate systems in place to ensure the safety of

our people and of our assets• Reduce our impact on the environment• Respect national and international laws and regulations• Work to the highest levels of ethics

Our commitment

The QSE process of our French organisation is integrated in our global process mapping thus showing its importance in our governance:

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Given these commitments, we promote the following ethical, social, environmental and information security policies:

An ethical policy that defines the prohibited practices and the

rules that each employee must apply in their relations with customers, suppliers and competitors.

This ethical policy is a Group policy that applies to all employeesincluding members of the Board of Directors. It was approved by the Board of Directors on March 21, 2019 and includes a procedure, a code of conduct and a statement:

• The processing of sensitive information• Anti-corruption code of conduct• Modern slavery statement

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A human resources policy that aims

to promote social dialogue, fight against all forms of discrimination, improve working and safety conditions, develop skills and respect fundamental human rights.

This human resources policy is based on a Group process and procedure that has been applied to all subsidiaries (with the exception of Amatech) and wasreviewed by the Board of Directors on July 30, 2019.

An audit is conducted once a year by the Group'sCorporate Secretary. The audit has been carried out in France, UK, Romania and the USA in 2019.

This policy is complemented by countries’ own policiesbased on their respective laws and regulations.

The Group’s process is as follows:

Search externally or internally then make

human resourcesavailable to meet the

needs of the company

Administrative management of

personnel

Continuouslycoordinate actions to

upgrade skills

Implement a climate of trust to promote and

optimize staff contributions to the

achievement of corporateobjectives.

Purpose: provide the company with skilled and motivated staff

Human resources process

Measurements of objectives:

- Progress in % of the training plan

- Absenteeism

- Staff Turnover

Recruitment Management Training Communication

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Environmental policy

The environmental policy is based on the continuous improvement of performance, the compliance with regulations, the prevention of pollution risks and the promotion of the use of products that respect biodiversity.

Sensitive to the potential impact of our products and processes on the environment, Paragon ID has focused on developing environmentally friendly practices over many years. This approach is based on the continuous improvement of our production facilities, the complete implementation of applicable regulations, initiatives to prevent pollution and the development of ecological products.

Paragon ID ensures all our sites base their environmental management systems on ISO 14001.

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Paragon ID is committed to controlling and reducing its energyconsumption across all production sites, using preventive actionsestablished locally by the teams dedicated to environmental conservation.

Our production processes are central to this activity and all new productsare developed with a focus on minimising their impact on the environment.

Awareness campaigns and training are carried out for all employees to encourage everyone to take an active part in the protection of our environment.

We analyse the impact of our company within each sector to reduce as far as possible any risk of pollution to the water, air or soil systems.

Our R&D teams prioritise the end of life and recycling process of ourproducts as part of the design method Wherever possible, we strive tooffer paper made from pulp derived from sustainable forests which meetthe PEFC and FSC criteria.

We accept and apply all relevant regulations concerning our business activities. These are shared and actively promoted across every business group.

In order to protect our planet, we must work together to reduce our impact on

the environment.

Our policy is based on the following commitments:

Environmental Policy

Reduction of environmental impact

Pollution Prevention

Regulatory requirements

End of Life & Recycling of Products

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Information security policy

The aims of the information security policy is to control and protect the information of our company, our customers and suppliers.

We confirm our commitment to protecting the data of all our stakeholders.

Paragon ID designs and manufactures products and services that are increasingly affected by the issues raised by data security. To ensure information is held confidentially, we have implemented an information security management system.

ISO 27001 has been adopted as the standard for all Paragon ID sites.

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Information Security Policy

Strategic and operational risks to information security are understood and addressed to ensure each risk is eliminated or reduced to an acceptable level for the company. These risks are monitored periodically and systematically scrutinised during the introduction of any major system updates or changes.

The confidentiality, integrity and availability of information is assured across all Paragon ID sites. Access management is monitored to ensure that access, disclosure and use of information is strictly controlled.

We take all necessary actions to ensure the company is in compliance with the applicable legal and regulatory requirements, prioritising investment in all aspects of physical security.

We make sure that employees and contractors understand their responsibilities and are qualified for the tasks to which they are assigned.Each staff member is made aware of their individual responsibility for information security as part of the duties assigned to their role.

Our policy is based on the following commitments:

The management team provides information security guidance and support in accordance with business requirements and applicable laws and regulations. The team is committed to the continuous improvement of our information security management system, ensuring that all Paragon ID companies comply with the General Regulations for Data Protection (RGPD).

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Governance

All these policies are implemented by the Management teams of the operating companies. They can differ according to the sites and the laws and regulationsin force. We have finalised our Ethics and Social policy along with ourEnvironmental and Information Security Management policies. They have been made available to all our subsidiaries.

A Corporate Social ResponsibilityManager has been appointed.

For each management team - depending on the requirements and because of the laws and regulations of each country, the approach may differ –Committees have been created or will be created:

• A "Management Review" committee that meets annually and evaluatesthe QSE approach,

• A safety committee consisting of the company director, the QSE manager, the IT and infrastructure managers, that meets once a year to analyze and decide on actions to be implemented to update the system,

• An ethics committee consisting of the company director, the HR manager (ethical referee), the QSE manager and the production and IT managers that assess new risks and implement the necessary actions.

These committees can be convened in case of emergency requiringimportant decisions.

A specific list of people based on their responsibility or relationships with customers, suppliers or other organizations, must sign the Health & Safetyand Ethics Policy and must commit to respecting and enforcing it.

To date, this policy is deployed in France and England. It will be deployed in Romania and the USA. The running of the committees is audited once a yearby the Secretary General of the Paragon ID Group, as well as the audits thatare planned as part of the ISO certifications.

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Paragon ID’s risks and challenges analysis

Identification of risks to better control them

For a number of years, the company has mapped the risks it may face. The method used consisted of making an inventory of the known risks by each member of the Management team, to measure their criticality and to identify solutions to limit their impact.

An update of the risks, their criticality and of the identified solutions is carried out every year and validated by the General Management team. The risks related to the “EFPD” (Extra-Financial Performance Declaration) were extracted and 6 have been identified in 3 categories:

Environment• To guarantee the respect of the law in force by reducing the

impact on the environment • To ensure responsible management of waste, especially air

pollution

Human resources• Accidents at work, in particular their frequency and severity, as

well as occupational diseases• Workforce turnover rate

Business ethics• Prevent and fight against corruption• Guarantee respect for human rights

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Given our business, the following topics are not among our main risks:

• the circular economy• food waste• the fight against food insecurity, respect for animal welfare, responsible,

fair and sustainable food

Given the late publication of the Fraud Prevention Act of 23 October 2018, we have not been able to integrate tax evasion into our CSR risk analysis and / or to address this issue. This theme, if it is a major risk, will be addressed next year.

These risks, as well as the objectives that Paragon ID has set for itself, are described in the following paragraphs.

Our main risks and objectives

The main risks identified within Paragon ID are grouped around 3 distinct

topics. At each risk or risk area identified, one or more clear objectives are

associated . The set of indicators was calculated over the period from July 1,

2018 to June 30, 2019.

ParametersThe indicators listed below have been selected to meet the regulatory requirements for extra-financial information.

The RSE information corresponds to the parameters of the Paragon ID company, including the following sites:• France - sites of Mouans Sartoux and Argent-sur-Sauldre• United Kingdom - Hull site• United States -Burlington site• Romania - Bucharest site

Risk management / environmental matters

In terms of environmental matters, the company aims to:

• ensure compliance with regulations by reducing the impact on the environment

• ensure responsible waste management, in particular waste productsreleased into the air

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Risk 1: Ensure compliance with regulations by reducing the impact on the environment

FindingsThe company has 4 production sites. The two main production sites, Hull and Argent-sur-Sauldre, have been ISO 14001 certified since 2011 and 2015, respectively.

Action planIn 2020, we want to have the Bucharest site ISO 14001 certified as well. This has been decided and is now one of the objectives of the site.

Indicators and objectives

Production sites certified ISO 14001 BBP PIROM PISAS INT'TAG

Certification obtained Yes No Yes No

Our goal is to obtain ISO 14001 certification for the Bucharest site by 2020.

Risk 2: Ensure responsible management of waste, especially air pollution

FindingsOur sites in Hull and Argent sur Sauldre release solvents into the atmosphere. These releases comply with the legislation in force. Our ISO14001 certifications assure this.

Action planTake numerous measurements of these discharges in order to compare them with the legal thresholds, then analyse the effectiveness of action plans implemented in these two sites.

Air pollutionBBP PIROM PISAS INT'TAG PID

VOC emissions

(Volatile organic compounds)Yes No Yes No No

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Risk Management / Human Resources

In terms of social matters, there are 2 identified risks:

• risk of accident at work: Paragon ID - in this case - aims to ensure the health and safety of its employees;

• risk related to the staff turnover rate: By controlling this risk, Paragon ID aims to retain its talents and, as part of its growth, strengthen its attractiveness to recruit new ones, in particular, turnover rates in the USA and Romania.

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Risk 3: Occupational accidents, including their frequency and severity, as well as occupational illnesses

Findings

During the financial year, there were 15 work accidents with workdays lost in the entire division. These accidents occurred mainly at the sites of Hull and Argent sur Sauldre (7 accidents at each site), and at the American site.

In the previous financial year, we had only three accidents at work, each of which resulted in a one-day leave of absence (the three at the Hull site). In comparison, this year had a particularly high accident-rate.

The frequency rate is the number of lost time accidents per million hours worked; this rate only takes into account contracted workforce. This rate was almost zero over the previous period.

Occupational accidents BBP PIROM PISAS INT'TAG PID Division

No of accidents with workdays lost 7,00 0,00 7,00 1,00 0,00 15,00

No of hours worked (in millions) 0,26 0,29 0,35 0,10 0,08 1,08

No of workers with contracts 133,00 145,00 213,00 51,00 51,00 593,00

Rate of occupational accidents

No of lost time accidents per million hours

worked; this rate only takes into account

contracted workforce

27,41 0,00 19,98 9,80 0,00 13,88

No of calendar days lost 205,00 0,00 182,00 31,00 0,00 418,00

Hours worked (in 000s) 255,36 288,84 350,39 102,00 83,90 1080,48

Severity rate of work accidents

No of calendar days lost per 1,000 worked

hours

0,80 0,00 0,52 0,30 0,00 0,39

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The severity rate is the number of calendar days lost per 1,000 hours worked. This rate was almost zero over the previous period.

It should be noted, however, that there was no declaration of occupational disease during the year.

Action planThe increase in work accidents at the Hull and Argent sur Sauldre industrial sites, compared to the previous year, is becoming a major concern for our company. That's why our goal is to ensure the health and safety of our employees.

To achieve this, the following actions will be taken:

• Meeting of a multidisciplinary team following each accident, in order to define causes and corrective actions;

• Sensitization of employees after an accident or near accident;• On the Argent sur Sauldre site, the "0 accident" criterion was revalued in

relation to the other criteria for awarding quarterly bonuses, in order to raise awareness and make all employees aware of potentially dangerous situations;

• To report each work-related accident to the Division, as well as best practices, in order to consolidate a safety training program

Indicators and objectivesThe indicators selected for the accident risk are:• the severity rate• the frequency rate

The goal is simple: 0 accidents

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Risk 4 : Workforce turnover rate

Findings

TURN OVER 2017-2018 PIROM PISAS INT'TAG PID Division

Workforce as of 30th of June 124 223 53 65 592

New hires 157 27 12 8 220

Departures 110 13 25 17 197

Including departure by own initiative

(resignation, “rupture conventionnelle”)110 2 10 4 126

Turnover: voluntary departures / workforce 88,71% 0,90% 18,87% 6,15% 21,28%

Workforce / age pyramid BBP PIROM PISAS INT'TAG PID Division

< 20Women 0 6 0 0 0 6

Men 2 1 0 0 0 3

20-29Women 16 30 3 6 1 56

Men 10 19 15 8 2 54

30-39Women 3 28 17 6 3 57

Men 10 6 40 7 5 68

40-49Women 9 36 31 2 8 86

Men 24 5 37 5 14 85

50-59Women 15 11 18 5 4 53

Men 24 3 43 3 12 85

> ou = à 60Women 5 0 2 2 1 10

Men 15 0 7 7 1 30

TotalWomen 48 111 71 21 17 268

Men 85 34 142 30 34 325

Grand Total 133 145 213 51 51 593

% of workforce 60 and above 15,04% 0,00% 4,23% 17,65% 3,92% 6,75%

TURN OVER 2018-2019 BBP PIROM PISAS INT'TAG PID Division

Workforce as of 30th of June 133 145 213 51 51 593

New hires 37 107 10 20 6 180

Departures 24 105 19 20 20 188

Including departure by own initiative

(resignation, “rupture conventionnelle”)19 90 3 14 3 129

Turnover: voluntary departures / workforce 14,29% 62,07% 1,41% 27,45% 5,88% 21,75%

Our company is made up of a diverse workforce, we value inclusion and ensure equal opportunities for all. The geographical position of each site has a different appeal, each employment area has its own constraints of attractiveness, employment rates and job design. Although recruitment is not a major problem in all our sites, attraction and retention of talent can be a real challenge in others.

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There are two elements to consider in the rotation analysis:

The age pyramid: Across the division, as of today, 30% of our employees are over 50, and nearly 7% are 60 or over. Given the specific knowledge and experience of these employees, we must anticipate their eventual retirement without losing their know-how. On the other hand, some of the division's entities are more successful in acquiring new, up-and-coming talent than others, which must be improved.

Turnover: the calculation that we use for this indicator is the number of voluntary departures initiated by the employee (resignation, ‘rupture conventionnelle’) from the total workforce. If we compare the overall rate with the previous year, we have a similar number. Analyzing it in more detail reveals that the Bucharest site has markedly improved, although their turnover remains very high. In contrast, English and American sites’ rate of employee retention has increased.

As these indicators only give a "trend", we must, in order to retain our talents and also attract new ones, reward loyalty and strengthen our attractiveness.

Action plan

Age pyramid:• Work on a major internship and apprenticeship campaign to ensure the

attractiveness of our company to the next generation; and• Work on a skills management plan at the entity level to avoid loss of

knowledge related to the departure of seasoned employees

Turnover:• Work on the integration path to help recruits to be more successful in

their new positions; • Further analysis of the causes of voluntary departures (interviews,

analysis of seniority at the time of departure) to adapt an action plan to combat the causes of this risk. 24

Indicators and objectives

The indicators selected for the turnover risk are:• The age pyramid• Voluntary departures / total staff

Our objectives are:

• On the age pyramid: Improve our current staffing base by hiring new, up-and-coming talent and ensure the retention of key skills and tribal knowledge with the departure of seasoned employees.

• On employee retention: The average turnover rate worldwide between 2013 and 2018 was 23% (Hays Group's "Preparing for take-off" study). We are currently at 21.75% across the division and want to achieve a "healthy" rate within each entity.

Risk management / Business Ethics

In terms of business ethics, Paragon ID aims to:

• prevent and fight against corruption • guarantee the respect of human rights

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Risk 5 : Prevent and fight against corruption

Findings

An anti-corruption policy was drafted and presented to the Committee in April 2019, to be distributed to all employees

Action plan

We must now make sure that all employees have access to and are aware of this policy. To ensure this, the anti-corruption policy will be distributed to all new hires.

An online training tool is being developed and is already being deployed at the Hull site. We are thinking of using this tool to provide identical training, for all employees of the division, on the subject of the fight against corruption.

We must also make the contact details of the training team available to the employees at each site in case they are needed to answer any questions.

Indicators and objectives

• Number of new hires who received the procedure: Objective 100%

• Appointment of an Ethics representative for each geographical area. Objective: 1 representative per site

• Implementation of the internal training tool: Objective: in place for the year 2020, with access to Ethics training

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Risk 6 : Ensuring respect for human rights

Findings

Our company is made up of various subsidiaries that have come together over the years through equity, acquisitions, mergers and creations. While the DNA of each entity is unique to us, we all share the same basic principles of respect for human rights, inherent in our culture and our societal commitments.

The subsidiaries of our company are all located geographically in countries that have signed the United Nations Charter of Human Rights.

Fundamental rights risk management is partially formalized at the level of each company in the structure; it is, in every country where we are located, integrated with the laws with regard to the following:

• Working conditions, for employees and for subcontractors (hours and working hours, Health and Safety),

• Compensation arrangements and the social security scheme,• Combating all types of discrimination and harassment,• Protection of personal data,• Freedom of association and freedom of union,• The fight against child labour and all types of forced labour (e.g.

practices similar to modern slavery)

Note that collective agreements are signed, mainly in France, where we respect the legislation in force. In the year 2018-2019, in France, we signed 3 agreements ( salary negotiation, profit-sharing). In Romania, an agreement is signed each year with staff representatives on the subject of minimum wages.

Action plan

Aiming to commit ourselves further regarding Human Rights, we wish to set up a common policy for the whole Society in order to reiterate how important respecting Human Rights is for us all.

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Once written, this policy will be disseminated to all employees, and deployed in the same way as our anti-corruption policy.

Indicators and objectives

• Drafting and dissemination of the Human Rights Policy: Objective: 100% of employees informed

• Number of new hires who receive the procedure: Objective: 100%

• Appointment of a Human Rights representative for each geographical area. Objective: 1 representative per site

• Implementation of the internal training tool: Objective: in place for the end of the fiscal year 2019-2020, with access to Human Rights training.

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Secure Technology for a Connected World

Contact :If you need additional information, please contact the Paragon ID CSR Manager

Mr Durant des Aulnoisdda@paragon-id.com+33 6 61 32 85 04

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